Category Archives: Mark’s Minutes

In a surprise move, UN suggested World should accede to Russia request to be allowed back to access to Swift and drop sanctions against Banks that finance Russia exports.  Still, G7 suggested ban on Russian exports.  Russia said that would guarantee end of Ukraine export corridor deal.

Agricultural markets were mixed as prices appear to be seeking levels that attract slumping export demand.

Time will tell if the expected rains are able to salvage much of a HRW wheat crop.  Forecast for much of the Midwest are shifting to a cooler/drier pattern into early May.

The macro mood is bearish; Crude Oil, CNY, and BRL lost ground last week.  Lower Brazil FOB cash offers are undercutting U.S. Corn and Soybean prices.  Better U.S. Plains forecasts and cheap Black Sea flows are bearish for Wheat.

 

Last week, Chic July traded to lowest level in 23 months, slow export demand and lower Russia and EU prices offers resistance.

Cold US south plains weekend temps is offering support to futures overnight, It will take a few days to access the extent of damage to US HRW crop.

US north plains and western Canada remains wet and cold

 

The market still seems confident that North American corn and soybean crops will get planted in a timely enough fashion, even though May is approaching quickly.  Forecasts remain cold but dry enough going forward for fieldwork to pick up.

Shipping data late last week showed a total of almost 80k tonnes of Brazilian soybeans set to leave for U.S. ports in the next week, in two separate cargoes.

Ukraine’s Ag Ministry reported cumulative grain exports at 40.7 MMT, down from 45.7 MMT on the comparable date last year, and including 13.9 MMT of wheat, 24.0 MMT of corn, and 2.4 MMT of barley.  Grain exports in April so far stand at 2.8 MMT.

The head of the Russian grain union sees record grain exports this season of around 60 MMT, including 50 MMT of wheat.

 

Mpls wheat +4

KC wheat -1

Chic wheat +0

Matif wheat +0

Canola -1

Rapeseed +3

Soybeans +1

Soybean oil -11

Crude -33

Corn -6

CAD +7

Poland and Ukraine have worked out a deal to allow sealed transits of Ukraine grain through Poland.

Russia’s Prime Minister Lavrov will meet with the UN chief next week on and extension of the Black Sea corridor agreement.

 

While CBOT held steady overnight, both KC and MGEX were marginally lower after impressive rallies the past few days.

Matif extended its gains to a 3rd consecutive session due to uncertainty over the grain corridor as passage for ships carrying Ukraine grain remained suspended for the 2nd day.

Asian consumers remain hand to mouth with feed consumers switching more and more to corn as the discount to wheat grows.

 

Wheat is continuing to see long liquidation and may be some new selling.

US 8-10 day weather forecast keeps adding needed moisture into US south plains especially KS and NE while SW part of US HRW acres should remain dry.

There is talk that HRW crop could be down 50-75 mil bu from early estimates.

US flour makers continue to talk about blending HRS and SRW to replace lower HRW supply

Lower Russia export prices continue to offer resistance to US futures.

World 2023/24 Major exporter wheat stocks to use ratio could drop to a new recent low near 12% vs 2009/10 high was near 23%

 

Spec money is flowing out of the grain complex this morning with the trade continuing to weigh the Black Sea situation

It is just another day as Ukraine reports the resumption of exports from its ports while Russian officials accuse Ukraine of sabotaging the deal by bribing ship owners

As the news hits the headlines, the Funds offer the market down until there are limited bids

Jordan bought 50k tonnes of optional origin hard milling wheat in an international tender yesterday morning, at $303/tonne C&F for late Oct shipment; they issued another international tender for up to 120k tonnes of optional origin milling wheat for Oct-Nov, and they have three companies taking part in their tender for up to 120k tonnes of feed barley as well.

South Korea’s NOFI bought 60k tonnes of South American soybean meal this morning at $554/tonne C&F for June-July shipment.

SovEcon yesterday raised their 2023 Russian wheat production estimate, from 85.3 last month to 86.8 MMT currently.

Ukraine’s Ag Ministry is estimating 2023 grain production at 50 MMT given favorable weather, down from 53.0 MMT in 2022 due to reduced plantings; that compares to a record 86 MMT harvest in 2021.

The Czech Republic estimated that the country has 40% more grain in stock than a year ago, or 2.6 MMT, with Ukrainian exports replacing Czech supplies in some markets.  Wheat stocks stand at 1.6 MMT, vs 1 MMT last year.

German farm cooperatives are estimating the country’s 2023 wheat crop at 22.15 MMT, up from 22.01 MMT in March but still down 1.6% YoY.

 

Mpls wheat -9

KC wheat -14

Chic wheat -10

Matif wheat -6

Canola -2

Rapeseed -9

Soybeans -5

Soybean oil -51

Crude -131

Corn -4

CAD -22

US wheat rallies on continuing HRW drought

US wheat futures hit breaking on Friday night and rallied 4% on the July KC contract, taking back all of the 3 previous sessions losses.  Mpls July finish +26.75c and Chic July +15.50c.

Kansas, which accounts for 25% of US winter wheat production is currently suffering drought/dry conditions in 88% of the state.  Across the US, around 49% of winter wheat cropping areas are experiencing drought.

Hungary has joined Poland in banning duty free agricultural imports from Ukraine following protests by farmers who stated it was undercutting their own industry.

The UN has written to Russia, Ukraine and Turkey raising concerns over the implementation of the grain corridor with inbound vessel inspections becoming less efficient.

 

Wheat futures are lower led by KC and MLS.  Could be some profit taking on long KC vs short Chicago.

There were some rains in E KS.  Western US HRW crop areas are still dry.

EU refused Poland and Hungary ban on Ukraine grain imports.

Large EU and Russia supply offers resistance to World wheat prices.

 

There remains plenty of time to plant, even with colder outlooks now through the month of April.

The wheat market seems a bit tired of the Black Sea grain deal rhetoric, but plenty of issues remain here in the U.S. with the winter crop in rough shape and spring wheat planting prospects off to a slow start, eut Every year we are surprised on how fast the farmer can put the crop in.

Russia is blocking inspections of ships in Turkish waters, under the Black Sea grain export deal, causing Ukraine officials to say the agreement is “at risk of being shut down”; Ukraine is looking to re-open grain movement through Poland after some neighboring countries (including Hungary and potentially Slovakia as well) have banned imports to protect their local markets.

Egypt has started offering corn on the country’s new commodities exchange, after the GASC has sold nearly 570k tonnes of wheat to local miller as well, since the launch of the exchange in November. Egypt’s GASC is also seeking vegetable oils in a tender closing Wednesday, for May-June arrival.

 

Mpls wheat -4

KC wheat -5

Chic wheat +3

Matif wheat +3

Canola +10

Rapeseed +6

Soybeans +7

Soybean oil +58

Crude -53

Corn +0

CAD -18

 

US wheat futures traded either side but finished in the red following April’s WASDE report which had higher US wheat ending stocks and lower world wheat ending stocks.

US wheat 2022/23 ending stocks came in higher than anticipated at 0.598bbu which was above the trade estimate and the March report figure of 0.568bbu.

World wheat ending stocks were decreased 2.15MMT to 265.05MMT which was below trade estimates.

The drain on world stocks was mostly due to an increase to China’s FW usage of 2MMT.

Russian wheat exports for April are estimated to come in between 4.2-4.5MMT, which is up over 80% y/y.

Yesterday’s news of a resolution between Australia and China over China’s 80% barley tariff is a buoy for exporters, a trade flow worth up to 1.5B each year.  China will conduct an expedited review over the next 3 months.

 

Wheat accounted for a surprising share of an otherwise low volume overnight session, chopping higher through the morning hours with Russia continuing to complain about their end of the Black Sea bargain and attempt to pressure the other parties and the West in general.

Hot and dry weather should be kicking off corn planting throughout the Midwest.

Jordan bought 60k tonnes of optional origin hard milling wheat yesterday at just over $303/tonne C&F, for late September shipment; they issued another tender for up to 120k tonnes for Oct-Nov shipment, with a deadline of 4/18.  Jordan made no purchase in their tender for up to 120k tonnes of feed barley.

South Korea’s NOFI bought around 60k tonnes of optional origin feed wheat this morning at $306/tonne C&F for late September arrival; the country’s millers bought 45k tonnes of U.S. wheat for June shipment as well.

Taiwan bought 65k tonnes of Argentine feed corn in an international tender this morning, for May-June shipment.

France’s Farm Ministry sees 2023 soft wheat planted area up almost 2% to 4.77 million hectares (11.8 million acres).

The Kremlin said the Black Sea grain deal “could not stand on one leg” and that the outlook for the agreement “is not good”, continuing to note obstacles for Russian agriculture and fertilizer exports. Meanwhile, Romanian farmers are threatening to begin a nationwide protest on June 7 unless the country bans Ukrainian grain imports and transit.  UKR Railways has also suspended cargo transportation to Poland until further notice, including wheat & grains.

Argentina’s government has authorized the country’s exporters to delay soybean shipments for up to 60 days; that follows similar measures for corn (allowed to delay by 180 days, agreed in March) and wheat (allowed to delay late last year) as the country experiences historic drought.  They’re hoping for increased sales under the new “soy dollar” policy, though soybean movement has still been slow so far this week.

 

Mpls wheat +7

KC wheat +10

Chic wheat +5

Matif wheat +1

Canola -7

Rapeseed -14

Soybeans -1

Soybean oil -57

Crude +65

Corn +1

CAD +9